Eurozone economy 'in dire straits'

As if Europe needed more bad news, a report Thursday showed a big drop in manufacturing activity across the eurozone.

The Markit eurozone PMI composite output index, more commonly known as a survey of purchasing managers, fell to 45.9 in May, according to the preliminary reading. That's down from 46.7 in April and marks a nearly 3-year low.

Any reading below 50 is a sign the manufacturing sector is shrinking, and economists say the weaker-than-expected PMI figure bodes ill for second-quarter gross domestic product in the troubled currency zone.

GDP, the broadest measure of economic activity, was essentially unchanged in the first quarter, meaning the economy didn't grow at all. That was still considered a mildly positive outcome, since many forecasters had expected the economy to have tumbled into recession in the first quarter.

Thursday's report is a stark reminder that all is not well in the euro area, which is also grappling with a potentially devastating sovereign debt crisis.

Ben Rooney is a staff writer for CNNMoney. He covers the European debt crisis and other international finance stories, in addition to writing about stocks, bonds, investing and other Wall Street-related news. Follow Ben on Twitter: @ben_rooney